How to have an 800+ FICO score:
- Have a 100% payment history
- Only utilize up to 25% of your available credit
- Have an average length of credit longer than 72 months
- Avoid hard inquiries - 4 maximum in 24 months
- Have 3+ open accounts
How to have an 800+ FICO score:
In reply to dculberson :
"Credit score has zero to do with how amazing you are as a person." That part I agree with and wrote as much in my reply to frenchy. The rest, eh, sure.
Going to not click on this thread again. Good luck to the OP.
Easiest way is likely find someone with good credit, run them through a wood chipper, and then use their SS number.
Actually, there is a way to boost your credit for a short time. People with excellent credit and long, long history's will put the "bad credit person" as a co-signer on their longest history credit card. They then get that much credit limit added, that much history, etc. No card is ever sent to them, no statement either. You can find these folks on various forums, they charge a different amount. That may be able to boost the credit enough to get you guys a mortgage.
I personally wouldn't do it, but hey--worth a shot? Maybe?
Appleseed said:Just read Welsh's other post. We are gonna work like hell to zero out the cards and then do the auto $5/month. Can anyone elaborate further on getting added to another's card? Do you just have to get added? Must you, personally, have to show activity?
No, at least in my case, I don't personally have to use the card for the benefit. I have a physical card in my name, but I don't use it.
It really depends company to company as I understand it, but someone can elect to make someone else an authorized user of their account. Discover was done online, but calling in would probably work too.
So if you do have good credit and am account with a long history, you could add her on like a joint bank account.
Has she pulled her credit history? I would start there. You get one free report from the three big players once a year: Equifax, Experian and TransUnion. Pull those reports and review them to make sure there are no erroneous entries that might be hurting her credit. If there are errors, address those through the creditor(s) individually.
As others have stated, pay down the existing debt to improve the credit/debt ratio. Pay more than the minimum to work towards paying down the principal (make sure your extra payments are being applied to principal).
Once a card is paid off only use it occasionally to keep it active. Pay off the new balance with the next statement. Some card companies will close out an account that is completely inactive, and that will work against her for both the credit/debt ratio and age of accounts, so use them at least once every 6 monrhs for something small and pay it off immediately.
If you need to buy an appliance, look into the finance options the stores may offer, many have 0% or a low rate for a specified period of time. If you were going to pay cash, use it as a way to build good credit and finance it, then pay it off before the term of the special rate expires.
pres589 said:"It’s a good indicator of how responsible you are. How trustworthy you are. How reliable you are"
It's an indicator of how much you use credit and repay on it. Using cash for 100% of your life means you would have essentially a zero credit score. That's what happened to me after the one credit card I had was closed after the lender itself was dissolved during the 2009 credit crisis. I ran for about five years on cash alone, zero debts carried (and that means not using credit), and when I decided I might want to buy my first home I was denied by three different lenders. Two off them seperately made the comment that they hadn't seen this happen before, and that I didn't have a score of zero, I had a blank score. I had to rebuild my credit through no fault of my own.
Short version: It's a score for people who are playing the game, and if you don't play they won't give you a very good score. And if you make some mistakes the only way to raise your score is to play more. It is not an accurate judgement of the person.
Bad credit/no credit cost me 7 million dollars plus! I was in the Navy and came upon a fantastic deal on a piece of property in San Diego. My earnings were enough to easily meet the loan requirements. The property should have sold for $50,000 but an instant sale was needed. So it was on the market for $35,000.
Because I’d lived on a cash basis and had a really nice cash nest egg for reserves I really should have got the loan. But without credit history I couldn’t borrow the money.
Every once in a while I check Zillow on the property and the last time I looked it was over 7 million dollars.
Cash Suxs !
frenchyd said:pres589 said:"It’s a good indicator of how responsible you are. How trustworthy you are. How reliable you are"
It's an indicator of how much you use credit and repay on it. Using cash for 100% of your life means you would have essentially a zero credit score. That's what happened to me after the one credit card I had was closed after the lender itself was dissolved during the 2009 credit crisis. I ran for about five years on cash alone, zero debts carried (and that means not using credit), and when I decided I might want to buy my first home I was denied by three different lenders. Two off them seperately made the comment that they hadn't seen this happen before, and that I didn't have a score of zero, I had a blank score. I had to rebuild my credit through no fault of my own.
Short version: It's a score for people who are playing the game, and if you don't play they won't give you a very good score. And if you make some mistakes the only way to raise your score is to play more. It is not an accurate judgement of the person.
Bad credit/no credit cost me 7 million dollars plus! I was in the Navy and came upon a fantastic deal on a piece of property in San Diego. My earnings were enough to easily meet the loan requirements. The property should have sold for $50,000 but an instant sale was needed. So it was on the market for $35,000.
Because I’d lived on a cash basis and had a really nice cash nest egg for reserves I really should have got the loan. But without credit history I couldn’t borrow the money.
Every once in a while I check Zillow on the property and the last time I looked it was over 7 million dollars.
Cash Suxs !
Could have played out differently though. Could have been stationed at Crane in Indiana. How much would that property have been worth today then?
Unless it was on the water, no way of knowing that the location would have blown up. Hell, you could have done better if you'd just put the mortgage payment towards Walmart or BRK. No need to look back and be depressed. E36 M3 happens.
Streetwiseguy said:It matters to Canadians just as much. We just don't have the access to it that is advertised on the States. I got 2.39% on my house mortgage a few years back, based on my credit rating, a boring life and never missing a payment. On anything. Ever.
I get that it does matter to some extent but I don't think it's that important here
Insurance companies, at least where I live, don't and can't use it (I don't think they are even allowed to access it) and being refused a job because of my credit history would never fly here.
This is why I have been saying for years that Credit and Finances needs to be taught in high school. Not an elective either, required to graduate. We shouldn’t have to fight to get and keep our credit in order or to even fix it.
My parents never told me about credit or anything (my mom couldn’t have good credit I save her life and my dad has always had good credit, but somehow couldn’t elaborate) and when I got into college, I was so confused why I kept getting told I had no credit. I couldn’t buy a contract cell phone and when I had a job and needed a new car, I was denied for a loan. Then I found out how fast you can mess it up.
Now I’m still trying to fix it. 
Suprf1y said:Streetwiseguy said:It matters to Canadians just as much. We just don't have the access to it that is advertised on the States. I got 2.39% on my house mortgage a few years back, based on my credit rating, a boring life and never missing a payment. On anything. Ever.
I get that it does matter to some extent but I don't think it's that important here
Insurance companies, at least where I live, don't and can't use it (I don't think they are even allowed to access it) and being refused a job because of my credit history would never fly here.
For insurance it is banned in Ontario, but not across the whole country. Not sure about for jobs in Ontario specifically, but I know it is practiced in at least certain parts of Canada.
mtn said:frenchyd said:pres589 said:"It’s a good indicator of how responsible you are. How trustworthy you are. How reliable you are"
It's an indicator of how much you use credit and repay on it. Using cash for 100% of your life means you would have essentially a zero credit score. That's what happened to me after the one credit card I had was closed after the lender itself was dissolved during the 2009 credit crisis. I ran for about five years on cash alone, zero debts carried (and that means not using credit), and when I decided I might want to buy my first home I was denied by three different lenders. Two off them seperately made the comment that they hadn't seen this happen before, and that I didn't have a score of zero, I had a blank score. I had to rebuild my credit through no fault of my own.
Short version: It's a score for people who are playing the game, and if you don't play they won't give you a very good score. And if you make some mistakes the only way to raise your score is to play more. It is not an accurate judgement of the person.
Bad credit/no credit cost me 7 million dollars plus! I was in the Navy and came upon a fantastic deal on a piece of property in San Diego. My earnings were enough to easily meet the loan requirements. The property should have sold for $50,000 but an instant sale was needed. So it was on the market for $35,000.
Because I’d lived on a cash basis and had a really nice cash nest egg for reserves I really should have got the loan. But without credit history I couldn’t borrow the money.
Every once in a while I check Zillow on the property and the last time I looked it was over 7 million dollars.
Cash Suxs !
Could have played out differently though. Could have been stationed at Crane in Indiana. How much would that property have been worth today then?
Unless it was on the water, no way of knowing that the location would have blown up. Hell, you could have done better if you'd just put the mortgage payment towards Walmart or BRK. No need to look back and be depressed. E36 M3 happens.
Realize how real estate works. With a small (or no in the case of Vets)down payment you control the entire value of the asset. If I had $35,000 sitting around I wouldn’t have needed a mortgage.
It’s the ultimate form of leveraging.
In reply to frenchyd :
Even with leverage, real estate tends to underperform equities. A total return calculator could show you how much different stocks have returned over the years. Suffice to say it’s eye opening for most people to see.
Some easy steps to good credit. Borrow money you don't need. Put it in the bank (or someplace smarter)- DO NOT spend it. Make your payments. Repeat as necessary. I wish I'd realized this sooner.
mine probably sucks. Never had CC, only ever had one car loan that I paid off in three years.
Wally said:Easiest way is likely find someone with good credit, run them through a wood chipper, and then use their SS number.
I have access to earthmoving equipment. Don't tempt me.
If she was added to a long standing credit card, would it impact the original owner? Under the assumption that she never use it?
In reply to Appleseed :
It didn't in my experience.
dculberson said:In reply to frenchyd :
Even with leverage, real estate tends to underperform equities. A total return calculator could show you how much different stocks have returned over the years. Suffice to say it’s eye opening for most people to see.
OK I bought my lake home GI nothing down. I even borrowed the $50 earnest money from the broker.
So if I invested minus $50 back in 1975 how much would I have gained?
And just to make sure it’s fair please add the cost of similar housing. Now fair is fair, I’ll add the interest cost back as well as property tax but subtract the the tax savings.
frenchyd said:dculberson said:In reply to frenchyd :
Even with leverage, real estate tends to underperform equities. A total return calculator could show you how much different stocks have returned over the years. Suffice to say it’s eye opening for most people to see.
OK I bought my lake home GI nothing down. I even borrowed the $50 earnest money from the broker.
So if I invested minus $50 back in 1975 how much would I have gained?
And just to make sure it’s fair please add the cost of similar housing. Now fair is fair, I’ll add the interest cost back as well as property tax but subtract the the tax savings.
You're looking at it incorrectly. It wasn't a $50 investment. It was a annuity that you were paying into. A regular deduction from your paycheck, much like a 401k. Now, like you said, you need a place to live--so obviously you'll be paying to live somewhere, but the point is that you don't know what is going to happen. What if your lake became poisoned? What if it became the only one where you were allowed to use motors? It could skyrocket in price, or it could drop to nothing.
frenchyd said:OK I bought my lake home GI nothing down. I even borrowed the $50 earnest money from the broker.
So if I invested minus $50 back in 1975 how much would I have gained?
And just to make sure it’s fair please add the cost of similar housing. Now fair is fair, I’ll add the interest cost back as well as property tax but subtract the the tax savings.
You just changed the parameters! You were talking about a house in California for $35k, now it's your house. Your home that you live in is not an investment, it is housing. You need housing. I was talking about real estate as an investment. Housing also underperforms equities - especially if you're honest with yourself about expenses. But that has nothing to do with your initial position about the house in CA.
Let's run some real numbers. When did you get out of the navy? Assuming 1975, that $35k invested in the Dow then would be $4.1 million today. You say the California house is worth $7 million, but that's assuming you had zero expenses in 43 years, which is not going to be even remotely true. And yes, you didn't have the $35k in 1975 but you would have had to spend it over the next few years to keep the house.
Real estate tends to appreciate at a little above inflation. Southern California has obviously bested inflation but that house could have just as easily been in Detroit. So, since we're cherry picking a real estate market, let's pick a stock that in hindsight did really well. $35,000 in Apple stock bought in 1980 (the year they went public) would be just shy of $14 million today.
People majorly overlook the effects of time and compounding on everything, but especially stocks. Throw in that they usually look at the share value of stock but ignore the effect of dividend reinvestments, it means most people vastly underestimate how stocks have historically performed.
dculberson said:frenchyd said:OK I bought my lake home GI nothing down. I even borrowed the $50 earnest money from the broker.
So if I invested minus $50 back in 1975 how much would I have gained?
And just to make sure it’s fair please add the cost of similar housing. Now fair is fair, I’ll add the interest cost back as well as property tax but subtract the the tax savings.
You just changed the parameters! You were talking about a house in California for $35k, now it's your house. Your home that you live in is not an investment, it is housing. You need housing. I was talking about real estate as an investment. Housing also underperforms equities - especially if you're honest with yourself about expenses. But that has nothing to do with your initial position about the house in CA.
Let's run some real numbers. When did you get out of the navy? Assuming 1975, that $35k invested in the Dow then would be $4.1 million today. You say the California house is worth $7 million, but that's assuming you had zero expenses in 43 years, which is not going to be even remotely true. And yes, you didn't have the $35k in 1975 but you would have had to spend it over the next few years to keep the house.
Real estate tends to appreciate at a little above inflation. Southern California has obviously bested inflation but that house could have just as easily been in Detroit. So, since we're cherry picking a real estate market, let's pick a stock that in hindsight did really well. $35,000 in Apple stock bought in 1980 (the year they went public) would be just shy of $14 million today.
People majorly overlook the effects of time and compounding on everything, but especially stocks. Throw in that they usually look at the share value of stock but ignore the effect of dividend reinvestments, it means most people vastly underestimate how stocks have historically performed.
If I had credit I could have bought that property in San Diego. Up until then I paid cash for every thing. So I didn’t have a credit score. GI bill allows vets to buy nothing down. Zero 0
If you invest nothing, zero, 0 in Apple in 1970 ( (when that opportunity presented itself) how much would you have? ( yes I know) my point is that to make money in the stock market you have to first have money.
Yes Vets do get a break but roughly 1/2 of all marriages end in divorce and when that occurs a lot of time people simply walk away from real estate, or maybe they are upside down on it?
So even people who aren’t vets can acquire real estate for little or even nothing down. Then whatever that property appreciates plus whatever equity they have in it is profit.
A $200,000 piece of property appreciating at a little more than the rate of inflation could easily be worthy more than a million by the time its paid for.
Let’s give you the rate of appreciation you mentioned with Apple ignore the fact that most people no longer own stock ( unlike my working days when more than 50% owned some in an IRA or 401k )
Now to average the best we need to consider the worst. Sears? In the 1970’s Sears was considered a gold standard. JC Penny? Woolworths?
How about automotive? AMC?
How many people invested in those? I know what the DOW did during that period. What were some of the really poor investments?
The stock market is a Gamble select wrong and you lose. Realestate even if you don’t meet the average you at least have a place to stay.
Frenchy, you seem to think you'd have gotten the land for free. You'd still have had to pay for it, over 30 years or so. So save that payment for 7 years, put it into a random stock, and hope it is Apple or Microsoft or Starbucks (which is effectively what you're doing--it was a random opportunity that you got, and it just happened that it took off in value).
And guess what, people lose in real estate too. What if you weren't stationed in San Diego? What if you had been in Pensacola? Could have been the exact same offer, the land sure as hell wouldn't be worth $7M today.
Appleseed said:SWMBO's credit is about 595 average. She's missed a few payments on credit cards in the last 6 months that I know of. She's had an auto loan, but she paid that off before we met. I never really inquired about past finances, so I have no idea about what she did to create such crappy scores.
Short answer - the late pays. According to FICO, that's 35% of her current score. If she has multiple missed or late pays on her record in the last six months, that alone will crater her score. Unfortunately the only way to get out of that hole proper is to diligently pay the bills for the next 12 months or so. The older the late pays get, the more her score will improve.
The other big factor is utilization - if she's getting over 30% usage on the cards as reported on her monthly bill, that also has a negative effect. Over 50% is a really bad hit.
What can she do to bring it up? Obviously make payments on time, but what else? Take out a small loan and used the loan money to pay it back? What advice can you give me to give to her? The quicker we can build good credit, the better.
I wouldn't - there isn't much of a magic bullet to solve this, unfortunately. Yes, you could make her an authorised user on one of your credit cards, assuming that it will report on her credit report as well (not all do). But it's not going to counteract the late pays for a while.
Also, I'd stay away from the shady credit repair people. That might get her a very temporary bounce, but it's going to backfire.
Lastly, as Eastcoastmojo said, have her check her credit report to see if there's anything bad on there other than the late pays. Obviously thanks to Equifax, the risk of ID theft is rampant at the moment. I'd also sign up for creditkarma.com, they have a pretty good analysis of the factors that go into her credit score.
mtn said:Frenchy, you seem to think you'd have gotten the land for free. You'd still have had to pay for it, over 30 years or so. So save that payment for 7 years, put it into a random stock, and hope it is Apple or Microsoft or Starbucks (which is effectively what you're doing--it was a random opportunity that you got, and it just happened that it took off in value).
And guess what, people lose in real estate too. What if you weren't stationed in San Diego? What if you had been in Pensacola? Could have been the exact same offer, the land sure as hell wouldn't be worth $7M today.
There are three things you have to have to live, Food, clothing, and shelter.
If you have money to invest first you have to have those three. So am I out of bounds to say with a house you’ve met at least the shelter part? ( let’s not quibble about the homeless, nor how you could live in a tent out on the desert for 30 years, ok?)
Investments are plain and simple a gamble. You are betting your money that you are smarter than others.
Real estate you are buying shelter with a reasonable expectation that it will be worth more when it’s paid for than what it cost you. It’s a sure thing. It will provide you shelter, it might be profitable.
The worlds population is more than doubled since my birth, the world hasn’t. So more than twice as many people want my home. It is reasonable to expect higher demand will yield more gain for me.
Now, like any good stock market investor I’m going to look for high demand as a indicator of greater return. So the same principles of investment in stocks will guide you in real estate.
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